1. The present two appeals have been filed by the Revenue against the order-in-appeal passed by Commissioner of Customs (Appeals) vide which he has set aside the order of the lower authorities confiscating five numbers of foreign markings gold biscuits and imposing personal penalty of Rs. 50,000/- (Rupees fifty thousand) on the first respondent Shri Ashoke Kr. Agarwal and Rs. 5,000/- (Rupees five thousand) on the second appellant Shri Jitendra Kamti. As per the facts on record, customs officers, on 19-8-97 intercepted Shri Jitendra Kamti while he was travelling in a bus from Siliguri to Calcutta. On interrogation the said person accepted having eight pieces of gold biscuits of foreign origin. On search of his person, eight pieces of gold biscuits were found tied to his thigh of right leg and duly wrapped in a black and white adhesive tapes. The said person could not produce any documents for legal acquisition of the gold biscuits in question. Accordingly the officers, on a reasonable belief that the biscuits were smuggled, seized the same. In his statement given before the Customs offices, Shri Jitendra Kamti disclosed that Shri Ashoke Agarwal was the owner of the gold biscuits in question. He further disclosed that Shri Ashoke Agarwal was having one jewellery shop at Siliguri by the name of 'Goyal Sons' and he was working with Shri Ashoke Agarwal for the last four to five months at a monthly salary of Rs. 1,200/-. He stated that the biscuits in question were given to him by Shri Ashoke Agarwal for onward delivery to one Pachharajji.
2. As a result of disclosure made by Shri Jitendra Kamti, residential premises of Shri Ashoke Agarwal were put to search on 27-8-97. However, during the course of search Shri Ashoke Agarwal was out of station and a statement of Smt. Sumitra Agarwal, wife of Shri Ashoke Agarwal was re- corded wherein she denied having any knowledge of seizure of eight pieces of gold biscuits. Shri Agarwal's business premises were also put to search, but nothing incriminating was recovered.
3. Thereafter repeated summons were issued to Shri Ashoke Agarwal on various dates but he did not appear. Ultimately after obtaining anticipatory bail from the Hon'ble High Court of Calcutta Shri Agarwal caused appearance before Superintendent of Customs on 6-10-97 and claimed the ownership of the eight pieces of gold recovered from the possession of Shri Jitendra Kamti. He disclosed that these gold biscuits have been purchased by him from M/s. Laljibhai Kantibhal Soni of Ahmedabad against cash payment of Rs. 4,59,200/- on 30-1-97. In support he produced photocopy of sale bill No. 527, dt. 30-1-97 issued by M/s. Laljibhai Kantibhai Soni of Ahmedabad regarding purchase of gold biscuits in question.
4. Enquiries were conducted by the Revenue from M/s. Laljibhai Kantibhai Soni of Ahmedabad who accepted having sold the gold biscuits in question to the appellants. They further clarified that the said gold biscuits were purchased by them from M/s. Chowksi Arvind Kumar and produced the copies of the bills for the same purpose. On enquiry M/s.
Choksi Arvind Kumar admitted having sold the gold to M/s. Laljibhai Kantibhai Soni of Ahmedabad and further deposed that the same was purchased by them from M/s. MMTC. They produced the bill for the purchase of the 800 pieces of gold biscuits along with xerox copy of bill of entry No. 440/97, dt. 28-1-97 showing import of gold biscuits by M/s. MMTC. The representative of M/s. MMTC was contacted and he admitted having sold the biscuits to M/s. Chowksi Arvind Kumar and having imported the same under bill of entry No. 440/97, dt. 28-1-97.
5. However, the Customs found that the examination report of Air-cargo Complex, Ahmedabad appearing at the back side of the bill of entry was to the effect that all the 800 pieces of gold biscuits imported by M/s.
MMTC vide the said bill of entry bore the markings "credit swisse", whereas the biscuits seized from the possession of Shri Jitendra Kamti were having different markings, except the three biscuits, which bear the markings 'credit swisse'.
6. On adjudication of the case the Additional Commissioner observed that only three out of the eight gold biscuits of foreign origin were having markings as 'credit swisse'. M/s. MMTC has accepted having imported 800 pieces of gold biscuits, all of which were of the markings 'credit swisse' and having sold the same to M/s. Chowksi Arvind Kumar, who in turn sold the same to M/s. Laljibhai Kantibhai Soni of Ahmedabad. Inasmuch as the biscuits recovered from the possession of Shri Jitendra Kamti were not having the same markings as were appearing in the gold biscuits imported by M/s. MMTC, the adjudicating authority was of the view that the documents produced by the appellant did not cover the seized gold biscuits in question. However, by extending the benefit in respect of the three gold biscuits, which had the same markings of 'credit swisse', as were appearing in the gold biscuits imported by M/s. MMTC, he released the said three biscuits.
7. On an appeal against the above order Commissioner (Appeals) set aside the order of the Additional Commissioner and by referring to some earlier decisions of the Tribunal held that the appellant having purchased the gold biscuits from M/s. Laljibhai Kantibhai Soni of Ahmedabad, who have admitted having sold the same to the appellant is sufficient to show the legal acquisition of gold and the onus placed upon the appellant under the provisions of Section 123 is discharged to the requisite extent. The Revenue is aggrieved with the above order and has filed the present appeal.
8. I have heard Shri A.K. Pandit, Id, JDR for the Revenue and Shri B.N.Chattopadhyay, Id. Consultant for the respondents.
9. It is seen that the gold is one of the specified item under the provisions of Section 123 of the Customs Act and as such the onus to prove that the same have been legally imported into India lies upon the person from whose possession the same is recovered or who claims to be the owner of the gold in question. Shri Ashoke Kr. Agarwal has admitted the ownership of the gold biscuits recovered from the possession of Shri Jitendra Kamti and have produced documents to show that the same have been legally purchased by him from M/s. Laljibhai Kantibhai Soni of Ahmedabad and have been legally imported into India. The enquiries were conducted by the Revenue from M/s. Laljibhai Kantibhai Soni of Ahmedabad who have admitted having sold the gold biscuits to the appellant. Further enquiries conducted by the Revenue from M/s. Chowksi Arvind Kumar and M/s. MMTC have revealed that the gold biscuits imported by M/s. MMTC were of a particular marking 'credit swisse'. The gold biscuits recovered from the possession of the second respondent were bearing markings as UBS Union Bank, Switzerland; Assayer Bonder and one piece was having the markings as Swiss Bank Corporation, Ten tolas-999.0. As such the question required to be decided in the present appeal is as to whether the biscuits recovered from the second respondents' possession and claimed to have been imported by M/s. MMTC are the same and as to whether the respondents have been able to discharge the legal onus placed upon them under the provisions of Section 123. M/s. MMTC has nowhere denied that the gold biscuits imported by them under the relevant bill of entry and sold to M/s.
Chowksi Arvind Kumar were with the markings 'credit swisse'. This fact is also evident from the examination report appearing at the back of the bill of entry. It is thus the biscuits carrying markings as 'credit swisse' which were sold to them to M/s. Chowksi Arvind Kumar, which in turn were sold to M/s. Laljibhai Kantibhai Soni of Ahmedabad who sold the same to the respondent. In these circumstances the biscuits recovered from the possession of Shri Jitendra Kamti ought to have been with the markings 'credit swisse'. Inasmuch as the markings appearing on the five biscuits of gold are different than 'credit swisse', the same have been held to be not covered by the documents produced by the respondents, by the Addl. Commr. and in my views rightly so.
10. The Commissioner (Appeals) has gone by the fact that M/s. Laljibhai Kantibhai Soni of Ahmedabad have admitted having sold the gold biscuits to the respondent herein Shri Ashoke Kr. Agarwal and as such the onus cast upon him under Section 123 of the Customs Act, 1962 clearly stand discharged. However, he has failed to appreciate that the bill of said gold dealer does not reflect upon the markings appearing in the gold biscuits. In normal circumstances such bills produced by the owner of the gold biscuits and found to be genuine by the Revenue would prima facie act in favour of the owner of the gold inasmuch as the same would show the legal sale and purchase of the gold biscuits, without any reference to the markings. However, in the present case the investigations have been carried by the Revenue further and chain of sale purchase of gold biscuits, ending with importation by M/s. MMTC have been established by them. Inasmuch as the biscuits imported by M/s. MMTC were admittedly of a different marking, it can be reasonably concluded that the biscuits recovered from the possession of the respondents were out of the same lot of biscuits imported by M/s. MMTC.As such the burden to prove placed upon the owner of the biscuits under the provisions of Section 123 of the Customs Act, 1962 cannot be said to have been discharged. It is seen that the respondents have already been given the benefit by original adjudicating authority in respect of three gold biscuits bearing the markings 'credit swisse' by observing that the same may be out of the lot of gold biscuits imported by M/s.
MMTC.11. Commissioner (Appeals) has also referred to the earlier order of the CEGAT wherein the Tribunal has observed that the seller "having admitted to have sold gold to the appellant by itself is sufficient to show the legal acquisition of gold" by the appellant and held that "the onus placed upon the appellant under the provisions of Section 123 is discharged to the requisite extent". It is seen that in the earlier order referred to by the Commissioner (Appeals), there were no further investigations by the Revenue leading to the importation of gold of a particular variety by the ultimate importer. It was in these circumstances the Tribunal observed that the factum of the gold dealer having sold the goods to the appellant would satisfy the burden placed upon him under the provisions of Section 123. In the instant case though the dealer has admitted having sold the gold biscuits under the bill issued by him, there is no reference to the markings on the gold biscuits either in the bill or in the statement of the representative of the gold dealer. As already observed in the ordinary circumstances the admission by the gold dealer for the sale of the gold biscuits to the appellants would have satisfied the provisions of Section 123, but in the instant case the investigations carried by the Revenue have disclosed the facts which are not favourable to the respondents. As such I am of the view that the release of the gold biscuits by the Commissioner (Appeals) cannot be sustained. Accordingly I set aside the impugned order of the Commissioner (Appeals) and restore the order of the Addl. Commr. confiscating the gold biscuits and imposing penalty upon the respondent Shri Ashoke Kr. Agarwal.
12. As regards the penalty on Shri Jitendra Kamti is concerned it is seen that he was only acting on behalf of his employer Shri Ashoke Kr.
Agarwal. Since Shri Ashoke Kr. Agarwal was having a jewellery shop there can be reasonable belief in mind of the said respondent that the gold biscuits given to him have been procured by Shri Ashoke Kr.
Agarwal legally. There is nothing in the statement of Shri Jitendra Kamti that the biscuits given to him can be smuggled or he was aware of the factum of the same being smuggled. As such I find that the imposition of penalty on Shri Jitendra Kamti may not be justified.
Inasmuch as the same has been set aside by Commissioner (Appeals) I confirm the order of Commissioner (Appeals) in respect of Shri Jitendra Kamti.
13. As a result the appeal of the Revenue is allowed as against respondent Shri Ashoke Kr. Agarwal and is rejected as against the respondent Shri Jitendra Kamti.